How to Prevent Embezzlement From Happening to Your Company
Embezzlement can devastate your business before you even realize that it is happening. Unfortunately, the nature of this crime means that it is often committed by those specifically entrusted to handle company finances. Preventing embezzlement requires taking a proactive approach related to payroll, human resources and other aspects of a business. Here are ways to increase your protection from embezzlement and how you should address the crime if it does occur.
What Types of Businesses Are Affected by Embezzlement?
Virtually any type of business can fall prey to embezzlement, but some positions are more commonly associated with the crime than others. In fact, a study found that two-thirds of embezzlers worked in accounting, bookkeeping or other finance positions. As long as money is involved, some unscrupulous employees may attempt to divert funds to themselves under the noses of their employers. Of course, embezzlers may have an easier time committing their crime at companies where less scrutiny and regulation is present to discourage it.
Tips for Protection Against Embezzlement
Have financial tasks handled separately by different employees.
For example, you should have individual workers perform payroll, pay bills and send invoices. This helps ensure that the numbers are analyzed separately for discrepancies rather than all being handled by one individual, who could more easily cover his or her tracks with no accountability to others in the organization.
Inspect bank statements regularly.
At the end of the day, money taken from your company is removed from the bank and should be reflected there. By taking time to look at your bank information yourself on a regular basis, you drastically reduce the chances that anyone can get away with taking money from your company. If your business uses credit cards, you should keep an eye on those bills as well.
Maintain positive workplace relationships.
While there are probably rare exceptions to this rule, satisfied employees are less likely to steal from their employers. For this reason, you should regularly work to ensure that your employees have a positive relationship with each other and with you.
Use positive pay notification.
Positive pay notification is a business service in which banks accept a list of checks written by businesses on a daily or weekly basis. Before cashing a check from your business, the bank will verify that the check is on your list. This can prevent checks written by embezzlers from ever being cashed in the first place.
Call a Lawyer if Embezzlement Occurs
If you think that embezzlement is occurring in your business, speak to John McDuff for guidance on the best approach to resolving the situation.Ultimately, law enforcement may be required to stop the problem.
Like any threat to your business, embezzlement is best addressed with prevention before it happens. The steps listed here can help you minimize your risks of being victimized by embezzlement. By remaining vigilant and being ready to seek help from an attorney, you will maximize your protection from this all-too-common source of business financial failure.